Rothaermel Exercise 3 Instructions

 

  • Why is it important for an organization to have alignment between its strategy and structure?

 

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  • The chapter describes the role of culture in the successful implementation of strategy. Consider an employment experience of your own or of someone you have observed closely (e.g., a family member). Describe to the best of your ability the values, norms, and artifacts of the organization. What was the socialization process of embedding the culture? Do you consider this to be an example of an effective culture for contributing to the organization’s competitive advantage? Why or why not?

 

 

  • How can a top management team lower the chances that key managers will pursue their own self-interests at the expense of stockholders? At the expense of the employees? At the expense of other key stakeholders?

 

 

 

 

  • The shared value creation framework provides help in making connections between economic needs and social needs in a way that transforms into a business opportunity. Taking the role of consultant to Nike Inc., discuss how Nike might move beyond selling high-quality footwear and apparel and utilize its expertise to serve a social need. Give Nike some advice on actions the company could take in different geographic markets that would connect economic and social needs.

 

 

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  • Why is it important for an organization to have alignment between its strategy and structure?

 

A strategy is the scope and the direction of a company over the long period  which  facilitates the attainment of competitive advantage for the company through its alignment of resources within  complex business  environment to meet customers needs and to fulfil the expetations of stakeholder (Joshnson et al. 2008). Oganizational structure is an important, intangible or tangible notion denoting  recognition, nature,observation and permanence of relationships of entities and patterns (Mintzberg, 1987).

Alignment and matching; a fit between strategy, structure and environment is crucial for proper strategic management. A strategy is directed by environmental forces which serve as a basis for identifying a structure. A firm achieves strategic alignment when its strategy and structure are aligned to the environment. The strategy and structure are matched to the firm’s capability through a process called “matching”.

A total alignment of structure and strategy enables an organization to achieve its goals and missions. An organization is made up of various elements that make up the structure which supports its strategy. These elements include the people, processes, procedures, positions, technology, culture and others. Therefore, it is necessary to note that a successful change in the strategy would not be possible without a change in the structure.

Any organization’s leadership looks forward to an effective strategy implementation process. Without a doubt, organizational structure is a critical component of this process. A firm’s success depends on the matching between business strategy and its organizational structure. It is important for an organizational structure to be stable and flexible to allow for successful implementation of the strategy.

According to Chandler (1962), successful execution of the strategy of an organization depends on the company’s primary organizational configuration. However, other scholars suggest that strategy follows the structure and the connection between structure and strategy tends to be reciprocal. The strategy decided upon by a firm influences the decision about a suitable organization structure.

  1. How can a top management team lower the chances that key managers will pursue their own self-interests at the expense of stockholders? At the expense of the employees? At the expense of other key stakeholders?

 

Sometimes key or top managers can think about doing pursuing their own selfish interest while working for an organization. They might also be tempted to make a decision which gives them credit and reward due to events which increase the organization’s profitability. Thus, they can make decisions at the expense of employees, shareholder and other stakeholders. For instance, top executives can decide to tie their compensation and rewards packages to the company’s shares of stock. To avoid such actions and cases and lover the possibilities of conflicts between the management and shareholders an organization can establish and execute effective control measures. A control system can be regarded as a primary governance mechanism created by an organization to limit the problems associated with differences in management levels (Schmidt and Kipnis, 1984). An effective system is characterized by standards, rules, regulations and targets against which enterprises can determine performance. They also examine the ultimate results and consider corrective actions against responsible individuals.

The management ought to introduce a rewarding and compensation program that consider the welfare of all employees without discrimination. An organization should put in place compensation policy and strict measures that protect the interest of all employees. Failure to adhere to such rules should lead to severe punishment. The top management team must involve other employees when it comes to the establishment of an incentive system. However, the system must be based on what the company can afford. Furthermore, there should be a system that governs the allocation of duties, contracts and functions of key managers, for example, equal distribution responsibilities and powers,  result contract performance and moral turpitude clause (Schmidt and Kipnis, 1984). Customers and suppliers can avoid the negative effects of self-interest by supporting regulation that addresses their grievances and ensuring that there are effective clauses and warranty that protect them.

3.The chapter describes the role of culture in the successful implementation ostrategy. Consider an employment experience of your own or of someone you have observed closely (e.g., a family member). Describe to the best of your ability the values, norms, and artifacts of the organization. What was the socialization process of embedding the culture? Do you consider this to be an example of an effective culture for contributing to the organization’s competitive advantage? Why or why not?

 

It is important for an firms to consider various factors as it seeks to achieve its goals, objectives and competitive advantage. One of the key factors is the business culture which describes the norms shared values as well as the artefacts that shareholders have. Norms can be defines is a set of guidelines that reveals socially accepted behaviour at the workplace. Organizational values guide the thoughts and actions of employees while artefacts include a firm’s surrounding and what is considered critical to an enterprise, for instance, interior design (Higgins and Mcallaster, 2004). I once worked in an organization that has successfully embraced its values, artefacts and norms. The organization served all customers in the same way regardless of their differences and background. Transparency, respect, dignity and humanity and accountability contribute to the growth and development of the firm. The organization’s standard of behaviour encourages democracy, teamwork,  responsibility and brings about order within the organization. All outlets of the company have attractive artefacts that captures people’s attention.

Top executives have a role of creating and maintaining organizational characteristics that encourage teamwork and reward employees based on their performance. Successful leadership is greatly dependent upon recognition and understanding of culture. Effective leaders develop a desirable culture through the formulation of values that are in line with the nature of operations. Values determine how people relate with one another within the company (Higgins and Mcallaster, 2004). The permanency of organizational culture is determined by the values. Artefacts include technology, style, brand among others. They serve as a firm’s identity and enhance its status within the business environment. If I would be asked whether the coming up with values and setting standards contribute to competitive advantage, I would say YES. Customers and employees are often concerned about their welfare. They would wish to be in an environment where their welfare is considered, something that cannot be attained in the absence of an attractive culture and artefacts as well as norms that govern human behaviour.

  1. The shared value creation framework provides help in making connections between economic needs and social needs in a way that transforms into a business opportunity. Taking the role of consultant to Nike Inc., discuss how Nike might move beyond selling high-quality footwear and apparel and utilize its expertise to serve a social need. Give Nike some advice on actions the company could take in different geographic markets that would connect economic and social needs.

 

Many changes have taken place in the world since the late 1900s thus transformation the business world. Researchers and engineers developed advanced technologies which have brought about great changes in the way organizations carry out their operations. With these developments, the business world is ever changing. The emergence of the internet coupled with knowledge and expertise has fueled globalization thus forcing managers especially those from international firms to shift from outdated and narrow approaches to value creation to shared-value and effort (Porter and Kramer, 2011). Shared-value approaches increase economic value since it involves sharing a common goal and ideas on how to achieve such expectations. The shares value creation framework does not only enhance economic status but also transforms an organization by considering social need that creates business opportunities.

 

Nike company can embrace share value approach by allocating fund meant to address social problems in various regions countries where it has established operations. The company can work in liaison with both governmental and non-governmental organization to support refugees, the less fortunate in the society as well as national and world events. Nike can build special schools for people with special needs in society. Such moves will enable the company to build a strong relationship with government agencies, businesspersons, political leaders, church leaders and potential customers. Besides, the approach will enhance the reputation of the company and at the same time create more business opportunities.

 

REFERENCES

 

Chandler, A. (1962).Strategy and Structure: Chapters in the history of industrial enterprise            Doubleday, New York.

Higgins, J. M., & Mcallaster, C. (2004). If you want strategic change, don’t forget to change your             cultural artefacts. Journal of Change Management, 4(1), 63-73.\

Johnson, G., Scholes, K., & Whittington, R. (2008). Exploring corporate strategy: text & cases.   Pearson education.

Mintzberg, H. (1987). Crafting strategy (pp. 66-75). Boston: Harvard Business Review.

Porter, M. E., & Kramer, M. R. (2011). The big idea: Creating shared value. Harvard       business review89(1), 2.

Schmidt, S. M., & Kipnis, D. (1984). Managers’ pursuit of individual and organizational   goals. Human Relations37(10), 781-794.

 

 

 

 

 

 

 

 

 

 

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